GOVERNOR PATRICK needs new tools to deal with economic threats that, if left unchecked, could lead to a fiscal fiasco in 2009. Business-as-usual practices on Beacon Hill can't cope with what the Massachusetts Taxpayers Foundation fears is a budget that is $1 billion out of balance.
Patrick is asking the Legislature for special authority to make emergency cuts in budget areas, including local aid, that are beyond his current powers. The governor already has unfettered power to cut spending in his Cabinet agencies. But that covers just half of the $28.2 billion state budget approved this month by the Legislature, according to administration officials. And half-measures aren't likely to be enough in a darkening fiscal climate.
With just two weeks left in the legislative session, lawmakers are dealing with weighty bills on a variety of issues. But preserving the state's fiscal health has to be a top priority. Lawmakers should expand the governor's emergency budget-cutting powers, and they should do it immediately. Patrick needs the management flexibility to spread the cuts across the board. And if cuts are needed, it's better to take action before service agencies plan their programs than to cut services in the middle of the fiscal year.
"Delay is death," warns Michael Widmer, president of the business-funded Massachusetts Taxpayers Foundation. "The longer you delay, the more savage the cuts have to be."
Patrick's concerns are also reflected in his veto of $122.5 million in the Legislature's budget, three times the amount he targeted last year. Not all of the vetoes are on target. Cutting anti-violence grants, for example, looks shortsighted, especially when he fails to veto cost-of-living raises for state retirees. Patrick distorts his message of fiscal responsibility when he increases the state's unfunded liability for retiree healthcare.
Administration officials say that they aren't panicky, but caution is in order. The severity of the cuts will depend, in part, on current negotiations with the federal government over a Medicaid waiver that is vital to funding the health reform plan. Hundreds of millions of dollars are at stake. But the state has no control over what is sure to be a falloff in certain tax collections. While budget forecasters initially expected $1.7 billion in capital gains tax revenues, that figure now looks optimistic as the stock market slumps and energy costs rise.
Given the political penalty, Patrick isn't likely to use expanded budget powers rashly. Wise use of reserves and new revenues from the closing of corporate loopholes could hold off some of the fiscal storm. But most indicators are shaky. The governor will need strong tools to button down the state.
